Why Wall Street Insiders Are Buying These 3 Stocks News ad

Insider activity in companies like Vestis is hot New York Stock Exchange: VSTSOPKO Health NASDAQ: OPKand Greif, Inc. New York Stock Exchange: GEFand investors should pay attention. Insiders, from board members to CEOs, CFOs and other corporate officials, are buying these shares in droves, signaling confidence in the above-average stock price outlook.

The question for investors is whether these stocks are a good buy in 2025 and how high their share prices can go. In two cases the answer is quite high, as support from analysts, institutions and retail investors is strong. On the other hand, investors may want to avoid the stock because the risk of dilution is high. Here’s why.

Vestis Corporation is preparing for takeover

Vestis Corporation is the former Aramark homogeneous products segment that was spun off at the end of 2023. The company is similar in size to UniFirst but less than a third the size of industry leader Cintas, making it a potential merger or buyout target. The uniform industry remains fragmented despite years of consolidation. Cintas is a potential buyer that has not yet made the cut. In fact, several buyout firms have expressed interest, but there are no offers from the firms yet.

Insiders have been buying Vestis throughout 2024, making it the most purchased stock by executives. Nine insiders made 14 purchases during the year, bringing their total stake to more than 13%. This is compounded by the high institutional share of almost 98% at the end of December 2024.

Institutions also bought netting shares in the first, second and third quarters of this year. The largest shareholder is activist hedge fund Corvex Management. Corvex made several purchases in 2024, owns more than 13% of the shares and may continue to make purchases in 2025.

Insider and institutional investor interest in Vestis is driven by the cash flow potential of the business. Cintas is an example of a company that can maintain dividend payments, increased distributions, share buybacks, and a strong balance sheet while reinvesting and self-financing.

Vestis pays a healthy dividend, representing less than 25% of its profits, and has a healthy balance sheet. The company has not yet repurchased a significant portion of the shares, but may begin to do so if it is not taken over or taken private.

OPKO Health has many catalysts ahead

OPKO Health has multiple catalysts that could cause its share price to skyrocket in 2025. However, the company’s capital position is precarious and it may not have sufficient funds to continue operations without positive developments. This may include key therapy approvals, acquisitions and normalization of diagnostics businesses. Analysts are optimistic, so there is hope. MarktBeat.com tracks the current ratings of three analysts; they pegged the stock as a Buy and see it rise 90% over consensus.

The risk includes shareholder dilution, which insider buying will only partially offset. Insider activity in 2024 includes 24 purchases by seven insiders, making it the second most popular stock for the year. However, the sale of company shares to raise capital increased this figure by more than 32%. The company has since authorized a share buyback, but $100 million is not enough to offset the damage and more sales could occur.

Greif insiders set market floor

Greif, Inc. is an industrial services company specializing in packaging. Its share price has been volatile over the past two years, but is now showing a solid bottom around $60. This bottom is supported by insider activity, which is buying shares at the bottom of the range and selling at the top. Insiders buying shares include the CEO, CFO and several directors.

The inside seller is the senior vice president; his trades occurred early in the year and were in line with share-based compensation, so this is not a red flag for investors. Insiders own about 3% of this industrial packaging company.

Institutional activity will increase volatility in 2024. Institutes own about 50% of the shares; their activity in 2024 will be associated with buying in the lower range and selling in the upper. Activity in the fourth quarter is bullish and rising, confirming the floor and suggesting that another rebound in stock prices will follow.

Analysts also point to a recovery in share prices. Marketbeat tracks seven analysts who have the stock assigned a Moderate Buy consensus and view it as a deep value trading below its minimum price target. A move that matches the analyst’s lowest target provides roughly 10% upside potential if the stock is near its low; moving to consensus will add another 20%.

A possible catalyst for this move could be the 2025 results, which are expected to include a wider margin.

Before you consider OPKO Health, you need to hear this.

MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat has identified five stocks that top analysts are quietly whispering to their clients to buy now, before the broader market takes hold… and OPKO Health wasn’t on the list.

While OPKO Health currently has an analyst rating of Buy, the top-rated analysts rate these five stocks as Outperform Buys.

View five stocks here

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